An article in Fast Company says:
As deficits impede the government from improving and repairing roads, bridges and airports, they are becoming increasingly amenable to the idea of a partnership with the private sector. Of late, big banks like Morgan Stanley, Merrill Lynch and Credit Suisse are starting to take an interest in financing massive infrastructure projects.
I say, not so fast, for two reasons.
The selfish one: I'm getting tired of seeing corporate names on public structures. They didn't build it, but they get to advertise on it. Our township library accepted a chunk of money from a local worthy, and now the library doesn't have our name on it, but rather his. Oh, so great for community image.
The pragmatic one: Banks and investing organizations are not your partners, not your friends, not susceptible to public votes. They want to make money, period. To assume that you can simply grant them the right to put their name on an infrastructure component and you then just rake in the money, coming out ahead in the end, isn't a good idea, because coming out ahead in the end isn't a sure thing. If the civic entity is hard up for funds (which is likely, else why consider this), they may be reluctant to take the new funds and use them to maintain and operate the structure -- rather, they'll likely think Hey, found money! You can't do that forever, but as budgetary people like to note, you only have to do it for one budget cycle at a time -- because nobody ever thinks past that. Plus, the new 'owner' may well increase the cost to the user of the function -- as the article notes: "Private investors recoup their money by maximizing revenue — either making the infrastructure better to allow for more cars, for example, or by raising tolls." In that case, the civic leaders are passing the buck, dodging responsibility. That will come back to bite them -- and the city as a whole.
So, do that naming warily, guys.
2 comments:
Our stadiums are normally built with public funds then "sold" (actually leased) to the private sector for a fraction of the cost in order for the private sector to pay for the upkeep.
It makes for expensive baseball games. Judging by the empty seats, this is not a good thing. The answer seems to be to raise the prices still more.
I could rant for hours on the horrors of privatization.
I think its one of those ideas that sound good in theory, but in practice not. And though I can't prove it, my bet would be that it's because no one agency is responsible for making it work effectively. I recall, years ago, when Donald Trump was trying to become well known, and he had a crew of his people repair a road in a day, where the city people would take a week. The reason, of course, was that he could staff and fund it to be able to do that, and the city was trying to scrape by -- but it made a great personality promo.
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